Management by Baseball

What do Hall of Fame baseball managers like Connie Mack & John McGraw have in common with today's business leaders? Why are baseball managers better role models for management than corporate heroes like Jack Welch, Jamie Dimon & Bill Gates? And just what does Peter Drucker have to do with Oriole ex-manager Earl Weaver?
Management consultant & ex-baseball reporter Jeff Angus shows you almost everything you need to know about management you can learn from Baseball.

Sunday, August 21, 2011

A Revelation From Fred Claire: How to Negotiate With a Competitor

In closed or limited organizational ecosystems, you have to be able to
negotiate with competitors. Not all of us work in closed systems, but unless
you're the rarer than rare person who has so much power he can force his will on
everyone (say, Saparmurat
Niyazov or Lloyd Blankfein) sooner or later, you'll be negotiating
with a competitor. It could be external...a company that's a direct competitor,
or internal, a territorial manager of an adjacent department or a department you
are competing with for resources.

Baseball is an almost-entirely closed system. Whenever you make a deal with
another team, you are pushing hands with an antagonist who, in a zero-sum
system, is seeking the exact same end goals you are: a World Series trophy. So
any asset to your side of the equation is most likely a debit on her side. In a
zero-sum system, it's pretty rare to get to a win-win outcome. (Bill
Bavasi told me this, btw, is one of the reasons some GMs far prefer free
agent signings -- it doesn't collide with the zero-sum nature of trading in a
closed system.)

SO HOW DO YOU DO IT?
Well, if it can be done anywhere, it will happen in the most vibrant, flexible,
advanced management arena in the world, Baseball. And the way you do it is to
analyze the situation in agonizing depth, or at least to a level considered
agonizing in the bush league management arenas that are the ones Beyond
Baseball.

I'll give you a great example I read recently in Fred Claire's 2004 book My
30 Years in Dodger Blue. The situation is this: In 1998, the Bums'
catcher and primo team star, Mike Piazza, and coming off arguably the best-ever
offensive season a catcher had ever had, was to become a free agent. Claire and
the Dodgers fiercely wanted him to stay, but new corporate ownership (Fox) was
focused elsewhere, and enforcing the normal post-takeover budgetary tightness,
while Team Piazza was indicating they were seeking the fattest contract in
Baseball history. Pre-season negotiations had failed to close the deal, so
Piazza entered the season unsigned, an indicator to other teams that he might be
traded (since a team that holds on to a good player who leaves for free agency
& signs w/another team is very unlikely to recover "full" value
for the loss of services). Other General Managers, such as the Florida Marlins' DaveDombrowski,
a leading practitioner of negotiating arts, would float offers, in the hopes of
adding immediate wins, or adding wins and signing the star, or alternatively,
flipping him to another team looking for immediate wins in exchange for a
handful of promising cheap youngsters.

So, this excerpt from Claire's book:

In that call, on April 10, our negotiations
with Piazza on hold, Dombrowski had inquired about Mike. His approach was
very direct -- "Fred, would you trade Mike Piazza and a young,
low-salaried pitcher for Charles Johnson, Gary Sheffield and Jim Eisenreich?"

I knew Dombrowski was under orders from
Florida owner Wayne Huizenga to unload payroll after the Marlins had won the
World Series the previous season and yeat had lost money in the process.
Sheffield was at the top of the Marlin salary list in that he had just signed
a six-year deal that paid him $61 million from 1998 through 2003.

Dombrowski figured if he could trade
Sheffield for Piazza, the Marlins would be free of the bulk of their future
payroll obligations. Furthermore, Dombrowski would be in a position to
acquire young players for Piazza in that Mike was in the last year of his
contract.

I went to Graziano
[Claire's boss] and told him {snip} I wanted to reply
to Dombrowski that we weren't interested in discussing Piazza because we
wanted to sign Mike, but we were interested in Sheffield.

My reasoning: I felt that as long as
Sheffield remained the focus of trade discussions, Charles Johnson would
remain a Marlin. The two made an attractive trade package, the high-priced
slugger paired with the lower-priced but highly-valuable catcher. If Fox
decided Piazza had to go, Johnson would be just the replacement we needed.
{snip}

A subtle, masterful playing of the chess board that can only happen because
Claire's workgroup has come to a blisteringly thorough understanding of the
other side of the negotiating table. The Dodgers still want to sign Piazza, but
they may not be able to, for whatever financial or corporate-political or
personal reasons. The Dodgers would like to keep the Marlins' younger, cheaper catcher
(and not as fine a player, but already Johnson was an All-Star and had won a
Gold Glove) in the trading pool so the Dodgers might snare him as a contingency
if Piazza left. But Johnson was a most-attractive player beyond his on the field
value; he was a logical pairing with Gary Sheffield, the personally difficult
but extremely productive and extremely expensive slugger in a trade.

So to keep Johnson from leaving the Marlins, Claire hoped to pin
the Marlins by expressing more interest in Sheffield than the Dodgers really
had. Getting Sheffield's and Johnson's prowess and payroll obligations wouldn't
necessarily be a tragedy, but why not try to get the sweeter benefit/cost
pairing alone (in Johnson)?

ADVANCED NEGOTIATION 400, IN, AND BEYOND BASEBALL
To attempt this required nothing less than the striving for total data
omniscience.

Claire and his group needed to:

examine the dollar and playing values,

learn and interpret the other side of the table's motivations and short-
and long-term plans,

interpret the Marlins' valuation systems and measuring factors as well as
their own, and

come up with either a win-win match-up, or, barring that,

a ploy that would freeze the Marlins pursuit of other deals as long as
possible .

And, oh yeah, without totally burning the other side of a table, because
(especially) in a closed system, you don't want to set off a neutron bomb (a
deal so bitter that it guarantees one side will never again do business with the
other).

In your own management, consider how complex the preparation for this
negotiation was. Are you good enough for Baseball (that is, do you prepare this
way)? You can in most cases, of course. It requires a level of research most
managers Beyond Baseball are unwilling to take on.

Maybe you can't be as skilled as Fred Claire, but I promise you it's worth
trying.

8/21/2011 11:02:00 AM posted by j @ 8/21/2011 11:02:00 AM

Thursday, August 11, 2011

Yellow Dandelions Trump Black Swans & Blue Oceans

The global Business of Business Advice is an odd industry. People write
articles or business publications on a theoretical idea. They try to spin the
idea in an original-sounding way, and if a publisher thinks the sound resonates,
it becomes a book. If the book and the publicity around it becomes widespread
enough, becomes a cult. Hundreds of thousands of readers, some of whom have a
lever, a fulcrum & a place to stand, think they might apply the theory in their own
workgroup or organization.

Roughly, for about every 1,000 copies sold, I estimate there are about 1,500
people who learn enough about the underlying principle to talk about the
one sentence description of the core theory. I estimate 600 of the books get
read through, maybe 30 people try to implement a project, initiative or makeover
based on the theory, and of those 30, you can count on the normal rate of
success (Angus' Second Law: 85% of corporate projects fail absolutely or are
euthanized (or forgotten) before completion, 10% deploy based on their original
goals and 5% deploy based on original goals and succeed). So for
every 1,500 people who can relate the core idea, 2 (rounding up so as to be a
bit optimistic) turns Business Advice into useful action. For the other 1,498,
it's just plaque, perhaps entertaining or diverting, but nothing that delivers
on the mission -- the explicit promise of business, leadership or management
advice.

Two of 1,500 is only an average. It can go up (or, more likely, go down) from
that proportion. There's an underlying reader trend that undermines the chance
for implementation. As a mass, readers would rather read about big ideas than
small ones, and they'd rather read about theory than practice. So the largest
readership goes to the big theoretical idea books than the practical (something
you do that creates positive action). And there's another factor that literary
(book) agents will tell you, too: Readers don't want to act on any of
this Business Advice - they just want to be entertained and feel good.

Here are two favorite examples of fun best-selling global Business of
Business Advice that are pre-destined to never reach the 2-in-1,500 successful
implementation norm: The
Black Swan Theory and Blue
Ocean Strategy. They are both giant ideas based that are probably quite true
but close to impossible for any individual or team to apply to anything bigger
than a lemonade stand. The Black Swan is based on the giant idea that, "A
black swan is an event, positive or negative, that is deemed improbable yet
causes massive consequences." Blue Ocean, "explains
how to create uncontested market space and make the competition irrelevant while
charting a new path to capture new market space that is ripe for growth".

Well, Yellow Dandelions
trump Blue Oceans and Black Swans...not for popularity and sales, but on two
counts:

You can actually
implement this idea in any organization, and

The net benefit of
deploying it will give you actual (not just theoretical) returns.

In 1889, N. Fred Pfeffer, the bare handed infield star and tactician with the
Chicago White Stockings of the 1880s...published a manual called Scientific
Ball {snip} At the heart of his defensive science was a "Code of
motions so perfected" that every man on a club knew what kind of ball was
to be pitched next. "Knowing this in advance, the men can so place
themselves so as to give the man in the box [the pitcher] the most effective
support.

{SNIP}

"Pfeffer believed that the fielder's job was to move at the very last
moment, when the pitcher was in his delivery, and that once a play had begun it
was imperative that the players knew how to back one another up. "Failure
to 'back up' players and positions has probably been as disastrous a feature of
losing clubs as any other which can be specified," he wrote. "Because
of this fatal weakness, scores of otherwise well-played games are needlessly
sacrificed each year."

The Yellow Dandelion
Deployment is one that, because Baseball is so transparent and overwhelmingly
meritocratic (both useful attributes wholly missing from corporate workplaces)
you can just plain see works out.

The teams that grab the
every-event, small but attainable advantages (in baseball parlance,
"execute") tend to win more games because they don't leave games'
outcomes as much to chance. If you watch a game for Yellow Dandelion Deployment,
watch the fielders "cheat" on many pitches, cover each other on
defense in a variety of ways based on the situation, you can see how absolutely
effective this is. Sadly, televised games, while great to watch, rarely expose
the Deployment. But I urge you to watch a major league game live (preferably
from the upper deck as close to directly behind home plate as you can) and watch
the extraordinary clockwork of a skilled major league team that has mostly
veteran players. Pick one non-catcher fielder out for each two-inning span and
try to follow what they do on every pitch, every ball in play. You'll see 120
years of refinement beyond Pfeffer's actionable principles, a level of teamwork
and management acuity beyond everything in the non-MBB management world.

Make sure that on tasks
that must succeed for your organization to succeed, each responsible person
knows she has one or more teammates to back her up, own some responsibility for
overall success. You have to start this overtly, not with a memo. Good managers
always take on the responsibility themselves of each contributor's success,
being there to back him up, but once a manager can break out beyond merely
taking on that backing-up personally and deploy it to the contributors nearest
the task-owner (not all others -- the right fielder can and will back up plays
to 1st base but it's a waste of energy to have him try, futilely, to back up
plays at 3rd) the useful contributors will learn the right back-up moves through
repetition.

What's the best way to
kick this off?

By both explaining the
back-up theory in advance and then starting to assign back-up contributors to
every task. These back-ups can be "editors", or "timers" or
"ambassadors".

"Ambassadors"
are most useful when a task is multi-departmental and the contributor assigned
to the task needs to enlist allies or try to push through work happening outside
her span of control; the ambassador helps with that external pressure.

"Editors" I use
to be the second pair of eyes for quality control; the editor is someone the
task-owner can bounce ideas off of and who can check deliverables for conceptual
or trivial kinds of accuracy.

What I call
"timers" are teammates who help the contributor stay on schedule and
co-own the deadline. The timer is not a non-com issuing orders or
applying pressure. The timer relieves pressure by being equally responsible for
knowing the task schedule and helping out the task-owner without having to be
solicited.

You probably won't have
to delegate each rôle on each project. You can certainly invent other rôles
that make sense within the context of your own endeavour, but invent a one- or
two-word name for each, so you can use the name as a shorthand. But you should
make a habit of assigning one or more back-up rôles to most every task.

At the completion of
every meaningful task with an assigned back-up, you should get the participants
to talk to the team about winning moves, or problems that would have been
smaller with new back-up ideas.

After a series of
successes, you invite contributors to deploy themselves as back-ups or invite
back-ups on their own. (In Baseball, it's terribly inefficient -- that is, a
losing strategy -- to have the manager assign every back-up on each pitch or
every play in the field; players need to be able to do this for themselves based
on established principles refined by their own practice and experiences.)

AVOIDING
YELLOW DANDELION DEPLOYMENT PROBLEMS
There are two common problems in Yellow Dandelion Deployments: non-accountable
or otherwise anti-team oriented contributors, and over-or under-management.

Some contributors resist
help, being too egocentric or believing teamwork shows them to be weak. Some of
these people are tractable, for example, if you point out how hard it is for a
single person acting alone to execute a double-play. But some are simply too
insecure or introverted to be comfortable having back-ups. You have one of two
solutions to this problem: if the person is a great contributor with great
success (think Barry Bonds) then exempt her from the routine; if he's not, get
rid of him.

And you can control the
over- or under-management. Over-management is removing from the contributors the
chance to have rôles delegated to them (which is the equivalent of a major
league manager trying to coordinate all players on the field with every pitch).
Under-management is not selling the teamwork benefits hard enough, re-deploying
people to the rôles they seem to best while still giving them chances to be
good at other rôles, or not monitoring the evolution of the system and its
outcomes.

The odds of you becoming
enriched through successfully identifying a Black Swan and then deploying a
counter are not 2-in-1,500, rarer than a no-hitter. The odds of you identifying
and deploying a Blue Ocean Strategy are no better.

But 1,500-in-1,500
managers in any organization that has seven or more employees can apply Yellow
Dandelion Deployments with success. Not only does it work, but it's actually
fun.

You may not actually ever
have three hits in an inning, like Fred Pfeffer had in a game on September 6,
1883, but you can knock out a bunch of hits everyday using his "scientific
baseball" principles.

Monday, August 01, 2011

Clarke's Second Law of New
Technology (paraphrased):For every human capability a technology creates,
it disables what exists; this may net out as progress or retardation.

In Baseball (and Beyond Baseball), new technologies that create the
capability to do things we've never been able to do before (say, Field
F/X,
which can measure infinitesimal speed and trajectory and rotational measures for
a batted ball) tend to add to human knowledge and "ability".

New technologies that merely make it easier to do the things we can already
do (broom-->vacuum cleaner, for example, or texting instead of voice
telephone), change the things we do in foreseeable and unforeseen ways, and they
don't always represent net progress. Author Arthur C. Clarke wrote a
classic sci-fi story that illustrates this counter-intuitive reality from a
military/industrial perspective.

There's a great Management By Baseball example that happened recently that
makes this effect, what I call The Peavy Principle, very easy to understand.

CHICAGO — The answer to how the
Washington Nationals would achieve their latest win seemed to reveal itself
in the second inning Saturday afternoon. Chicago White Sox starter John Danks
walked off the field, a strained muscle having ended his day after six
batters. The Nationals could feast on Chicago’s bullpen and chalk up
another win. Just the usual.

“I thought we got a break,” interim
manager John McLaren said. “I thought we were going to hit their bullpen.”

But after spending two weeks convincing
themselves they can’t lose, the Nationals lost to the White Sox, 3-0,
before 23,008 at U.S. Cellular field, just their second defeat in 14 games.
The Nationals managed two hits and struck out 11 times over 7-1/3 innings
against the White Sox’ bullpen, which received a dominant cameo by veteran
ace Jake Peavy, making the first relief appearance of his career. {SNIP}

Peavy dominated for four innings,
allowing a single and no walks while striking out seven.

Before each series, the Nationals’
hitters gather in a small room adjacent to their clubhouse. With hitting
coach Rick Eckstein, they watch video and study tendencies of each starter
they will face and the relievers. Peavy, who started Wednesday for Chicago,
fit neither category. “I didn’t see Peavy’s name on that list,”
McLaren said.

Though the Nationals never mentioned Peavy
in their hitters’ meeting, they still gave credit to his pitching. “The
bottom line is, we just didn’t swing the bats well today,” third baseman
Jerry Hairston said.

In the last fifteen years (depending on which team, a little earlier or a
little later), video library software has given coaches the ability to create,
with just a few hours of assembly by the coach or other team aides, wonderfully
organized and informative video tutorials on how opponents play, their biases
and tendencies and quirks and tells. This new technology replaces a prior,
non-technological way of doing it; word-of-mouth verbal sharing of information,
three-ring binder collections of data points, exchanged tips in the batting cage
before the game, exchanged tips in the dugout during the game.

It's not that none of that pre-video library software information
happens; it just has become secondary, delivers less impact than the new way
and, therefore, becomes relatively devalued by most of the participants. By
making a high-tech system THE WAY to get 'er done, the other ways seem to be
"old fashioned" or lower yield.

But for every ability an augmenting technology increases, it undermines an
existing capability. By being able to hyper-focus intense information about the
White Sox relievers, that attention gets invested, and so a resting starter,
Jake Peavy, who comes into a game as a reliever, is glossed over in the chosen
techno-path to success. ¿Did the Nationals have three-ring binder back-up? I'm
not sure; when interim Manager McLaren skippered in Seattle, I saw him carrying
two. But as a recently-appointed interim, he would work with the protocols the
team had already worked out. Even if they did have it, the batters would
have already tapped their cognitive investment in other, more fluidly-acquired
accustomed ways of getting data. They cannot have helped but instinctively
valued the video information over the old-fashioned.

In Baseball (an endeavour much
more brutally zero-sum competitive than the easier work domain you manage in)
a Jedi Master of finding a cognitive edge like White Sox manager Ozzie
Guillen, undoubtedly knew there was some tiny (not giant) advantage in
putting on the mound an unscheduled reliever, but in Baseball, because
it's zero-sum, tiny advantages loom large. The reality that Jake Peavy is a
monster pitcher when he's healthy had to have been a consideration as well. And
Guillen is as prepared as any manager in any field; he and pitching
coach Don Cooper would always, every game have a Plan B for who would
come in early in a still-close game if the starter is injured or blown out.

In Baseball, technology that replaces manual + verbal methods may enable
people to do what they did before faster or cheaper, but it makes the knowledge
more brittle, less hands-on, more shallowly textured. Technology eats some of
the nuance while spitting out better volume...what I call The Peavy Principle.

THE PEAVY PRINCIPLE BEYOND BASEBALL...
...is actually quite wide-spread. The most wide-spread example is cell phones
replacing land-lines. It's not technology that gives us unprecedented abilities,
but does augment the span of places we can use a telephone or type messages or
play games or execute frozen pork-bellies futures contracts. Mobile gives us
mobility, the capability to call from most anywhere (unless you're a Sprint user
in suburban Chicago or an AT&T victim in San Francisco). But the quality of
communication goes down as the degraded fidelity eliminates audible intonation
and voice affects. Is the trade-off worthwhile? For most users, I suspect the
answer is probably yes, but for communications that require clarity (business,
romance, intelligence), the loss is palpable and costly.

I'll give you a concrete example from my own practice. I was one of the
earliest users of project management software, but I didn't learn on it. Before
there was software, PMs worked with a surprising range of physical tools. I used
mechanical pencil on graph paper and, of course, had to do trial and
error, making copious use of the Eberhard
Faber Eraser Stick (known in the trade as a "poodle penis"). I
wouldn't describe this as "the good old days"; it was truly
challenging, and I welcomed my SuperProject
and later my TimeLine
(a now-gone package that was at least 4x as productive as anything on the market
today). I was project director on a USEPA contract that had 23 people who through
the project worked asynchronously in 10 cities...a massive logistic effort that
additionally required a lot of knowledge about the individual talents (no two of
whom had the same strengths and weaknesses) and concurrently was an attempt to
prove to the agency that a co-op could deliver comparable quality at lower cost.

Setting up a project was faster this way than it is using even good project
management software. Recalculating in software is much faster than
erasing/rebuilding-by-trial-and-error. Getting the first draft done is much
faster in software. But woe to the software-only solution when the plan veers
away from the original plan enough that it requires resequencing, or re-applying
the individual talents of non-commodity labor from one sequence to another.
Because project management software "believes" people are commodities,
and it's almost impossible to program human interdependencies or stored
knowledge into the database that sequences decisions.

I could actually do this significantly faster by hand. So can most
professionals who did or do it by hand, because the physical drawing and erasing
of lines, not delegating that to a machine, gives the PM a much stronger and
more textured understanding of the interdependencies.

People who learned on software (most contemporary PMPs) and at the same time
never do it by hand tend to undervalue the aspects of project management that
the software is counter-productive for or simply doesn't do. Most
learned-it-using-software suffer from The Peavy Principle, that is, they can do
it fast, but by delegating the knowledge to a
technology, they can overlook
details the technology ignores, filtering out valuable information simply
because the software developer didn't value it, or because it was costly or
perhaps impossible to embody in software.

By stuffing the data into a digital container, removed from the visible and
manipulable world of physical artifacts, they master technology, but undermine
the fullness of their craft -- as my associate Athena explained to me when she
was taking a PMP certification course, they were teaching people how to operate
software, do effective data entry and report their results thoroughly, not how
to manage projects.

I'll give you a another equally-painful example, in case you have no
experience with project management. Handling data.

Many of us who analyse data for a living actually comb through the raw data
before we start analysing it. It's time-consuming, and doesn't always have big
rewards, but we find that the exploration gives us a better handle on it and
makes it easier to track the exceptions that indicate valuable insights or dirty
data. Some of our peers, though, trust data enough to make it an unseen artifact
that's hidden in a digital container. Even when they use other software to flag
exceptions or pinpoint certain kinds of out-of-scope points, they can miss
subtle flaws that the technology helper wasn't programmed to recognize.

Even famous and brilliant scientists who don't respect the data (the noun,
the reason for the analysis) as much as the tool used to analyse it (the verb)
are missing a key piece of the grammar of data analysis. A few years ago I read
a serious clever baseball researcher's article on platoon splits (the ability,
for example, of a right-handed batter to hit left-handed pitching overall better
than right handed), and he had come to the conclusion that it was not a skill
(not a repeatable event, but one driven by luck or other external factors). His
results were quite unequivocal.

I was surprised but interested, because platoon splits are a piece of
unquestioned protocol and I love to question the unquestioned protocol. I'd
fiddled with this problem before without coming to useful conclusions, and he
had taken a very different tack in the analysis and had compiled a great swathe
of data. I asked him if he would give me a copy of the data to work with, and he
generously shared it.

I opened the file with great anticipation and started combing through the
individual rows, associating codes with the players they referred to, their
seasons, all artifacts I'd never had the pleasure of examining as consolidated
numbers. But you can imagine how disappointed I was when I saw that much of the
data was flawed, the result of a bad transform routine, one that repeated two of
the fields every so many rows (not all rows, not all fields, but regularly
making false certain rows in a predictable sequence). Each one of these rows was
within scope, and every one, taken alone, was feasible. There were no out of
scope characters or out of scope row lengths -- it was a giant pile of broken
data that smelled fresh to data cleaning routines, and turned the research
conclusions from significant to not. Only a human eye and brain considering
patterns would detect the underlying errors.

I did send the deck back to the mathematician with a note, and thanked him.
His push back was that I must be mistaken and that errors would have been caught
by his technology. He had evolved out of being a scientist and into a technology
midwife. If he ever opened his file and looked at it line by line (honestly, an
exhausting task), he would have known. The technology that enabled him to adsorb
vast piles of data and clean and analyse it and deliver insight by a thousand
slices had left him exposed to intellectual death by a thousand cuts. It had
enabled vast quantity while degrading critical quality.

What technologies do you use that threaten to impose the Peavy Principle on
your efforts? If Baseball, the most productive and accountable user of
technology can get screwed up by the Peavy Principle, I'm telling you it can
mess you up, too.